The administrators' further evidence
18 Mr Park affirmed a further affidavit on 29 October 2024 in support of the extension of the convening period, which also dealt with the need for expedition and the necessity for completing the agreement for the sale of IGPC's assets, including its interest in the joint venture, to CEPL (hereinafter, the "Sale Agreement"). In that affidavit he deposed that:
(a) in the administrators' view, the Sale Agreement is on significantly improved terms when compared to the best and final offer received (and recommended by) the former administrators;
(b) the other administrator, Mr Campbell and he were of the opinion that ongoing delays in being able to resolve the transaction was not in the best interests of the creditors of the Companies because:
(i) the administrations have been ongoing for a substantial period of time;
(ii) the investigations into the availability of claims relating to the catastrophic failure of a generation unit at the Callide Power Station have been completed and the administrators are ready to report to creditors in respect of those claims;
(iii) the completion of the Sale Agreement and the agreement the subject of the first judicial direction application are the only outstanding substantial matters left in the administration;
(iv) there have been substantial sale processes conducted in relation to the sale of the assets of the Companies under administration and, if they do not complete, the administrators will have to re-engage with bidders in order to ascertain whether alternative transactions could be pursued;
(v) any further delay in resolving the administrations may prejudice the sale of assets to CEPL by IGPC because the Sale Agreement can be terminated by CEPL if the judicial direction is not obtained prior to a particular date (referred to as the "CP Satisfaction Date"). Accordingly, if that does not occur, CEPL may seek to negotiate a lower sale price;
(vi) at the time of swearing the affidavit, CEPL had not responded to the administrators' enquiries about extending the time for the satisfaction of conditions under the agreement;
(vii) there is a risk that an extension will not be granted or, if one were, that it would only be of limited duration and that will imperil the transaction;
(viii) the ability to negotiate an extension would be significantly improved if a hearing were held this year; and
(ix) the return to creditors could be negatively impacted by substantial delays given the ongoing costs of the administration process;
(c) Mr Campbell and he have limited funding in relation to the ongoing conduct of the administrations, and it was desired not to seek further funding; and
(d) Mr Campbell and he are of the understanding that if the matter continues into 2025, there will be increased trading costs because a material contract in relation to the operation of the businesses of the Companies will be completed this year and there is a limited ability to continue it to the following year and, further, a key trade creditor is requiring improved pricing under its current contract which would have a material impact on the trading costs.
19 In light of these matters, Mr Park deposed that the administrators were of the view that it was appropriate to pursue a hearing in the course of this year, and that a hearing being delayed until next year would have a serious impact on the ability to manage the administration in the interests of creditors.
20 During the hearing, some emphasis was placed on the imperative for an expedited hearing due to the risk to the Sale Agreement between CEPL and IGPC. It was indicated that the completion of that Agreement was at risk if certain conditions precedent were not completed within certain dates. As mentioned, one of those conditions concerns the hearing of the second judicial direction application and a decision being made in respect of it by a particular date. It is not necessary to identify what that date is, though it might be assumed that it would be some date prior to 20 December 2024, being the latest date to which the administrators considered it was appropriate to extend the convening period.
21 In the administrators' second set of written submissions, it was said that:
The IGPC transaction document contains a "CP Satisfaction Date" which gives rise to the relevant urgency. There are also commercial consequences of delaying the hearing which are identified in paragraph 7 above. …
(Footnotes omitted).
22 In the course of the hearing, in an attempt to clarify some matters raised on behalf of Sev.en Global, counsel for CEPL submitted that there was no evidence that CEPL would seek to terminate the Sale Agreement if the dates for completion of the conditions precedent passed without satisfaction. It was indicated that more information on that topic was contained in a confidential exhibit to Mr Park's affidavit affirmed on 29 October 2024. However, those exhibits had been excluded from the material before the Court because they were not available to Sev.en Global, and no consideration was given to them. Nevertheless, CEPL reiterated that there was no evidence that it would seek to terminate the Sale Agreement if the condition precedent concerning the judicial direction was not satisfied within the stipulated time.
23 By the end of the second hearing, there was significant uncertainty as to the extent to which the Sale Agreement would or could be imperilled by the non-satisfaction of a condition precedent by the stipulated date. The submissions made on behalf of the administrators and CEPL appeared to conflict in several significant respects and resulted in the unfortunate consequence that the administrators' submission, based upon a sworn assertion that expedition was required due to the threat of termination, was severely undermined. It also lent support to the submission of Sev.en Global that the administrators and CEPL were seeking to pressure the Court into providing an early hearing.
24 It is most unfortunate that these circumstances have arisen. It would have been pellucid to both the administrators, CEPL, and their respective legal representatives when negotiating the terms of the Sale Agreement, that agreeance to any particular date by which judicial advice was to be given would be likely to impose pressure on the Court to accommodate it. It would have been a task most elementary for the administrators to have obtained a case management hearing to ascertain the Court's availability to hear and determine their proposed application. Indeed, an email to the docket judge's chambers could have sufficed, provided that the concerns of interested parties had been addressed. This is not litigation in which any of the parties have found it difficult for the Court to accommodate the hearing of the several disputes which have arisen since last year. Given its singular importance, the hearing of such applications and the delivery of judgments in them have been accorded substantial priority over other pressing matters.
25 CEPL and the administrators are unquestionably represented by some of Australia's leading lawyers. That being so, it is difficult to imagine that they were not adequately advised that if they were to agree to a condition precedent providing a date by which a judicial determination had to be made, it would generate pressure on the Court to determine the application as a matter of urgency. If that assumption is correct, it would be most concerning that the administrators chose to enter into the Sale Agreement in the form in which it now appears. There is, however, insufficient material to reach any conclusion on that issue. It may well be that no attention was paid by anyone to the effect of choosing a short time period by which the second judicial direction application was to be heard and determined. However, regardless of whether the circumstances now arising were the intended or unintended outcome of the administrators' entry into the Sale Agreement, it is a problem of their making.
26 There may well be other good commercial reasons for why the circumstances of urgency have arisen, including those matters which are referred to in Mr Park's latest affidavit relating to the diminution of the value of IGPC's assets if the time for the completion of the sale is extended into 2025. The existence of those matters may well have provided a complete justification for the agreement to the date by which the judicial direction must be given. That, unfortunately, was not the way in which the matter was advanced to the Court. Rather, the administrators' case was, in effect, that they were required to seek an early hearing date for the second judicial direction application because of the impending passing of the date by which the direction needed to be given. Inferentially, it was suggested that this was somehow a matter beyond their control. Self-evidently, it was not.
27 It is also correct, as was submitted on behalf of Sev.en Global, that there is nothing in the material which suggests that the administrators have made any suitable endeavours to ascertain why it is that CEPL might terminate the Sale Agreement based on the non-satisfaction of the condition precedent. It is notorious that CEPL is effectively owned and controlled by the State of Queensland and that, in the course of the hearing of several applications in this Court over the past 11 months, the State of Queensland has made it clear that it is desirous of acquiring a 100% interest in the Callide Power Station. That is a fact which would be known to the administrators, and one which renders it unlikely that CEPL will terminate the Sale Agreement merely by reason of the non-satisfaction of a condition precedent. It is unfortunate why they did not identify that factor as partially or completely ameliorating any concern that CEPL would think to terminate the Sale Agreement if the opportunity arose. Although the administrators put the threat to the Sale Agreement at the forefront of their submissions, as the extract from their written submissions indicates, the practical realities of the circumstances suggest that any such threat is chimerical.
28 It must also have been within the contemplation of the administrators and CEPL that any application for judicial directions in relation to the transaction would be opposed by Sev.en Global. The protection of its claimed interests in IGPC has been the focus of its conduct in relation to the administration for the past year. It is relevant that, though the administrators were informed on 14 October 2024 that any attempted sale of IGPC's joint venture interest to CEPL would be opposed, they nevertheless entered into the Sale Agreement four days later. They must be taken to have been acutely aware of the date for satisfaction of the condition precedent relating to the receipt of a judicial direction, and that any shortened timeframe for that to occur would inhibit Sev.en Global's ability to prepare for the hearing of that application.
29 Whilst the ability of any resisting party to respond to an application for judicial advice is not necessarily a consideration for CEPL, one might have expected the administrators to have given some thought to the likely consequence of agreeing to a limited timeframe for the completion of the condition precedent in question. That should have included the ability of any interested person having a reasonable opportunity to respond to it. In the present matter, given the importance of the assets at stake and the intensity with which the parties have hitherto sought to protect their interests, it is not likely that a hearing of the application for judicial advice will be of a pedestrian nature. On the contrary, it will necessarily be hard fought. As Mr Withers SC submitted, Sev.en Global will need to prepare its material in relation to the appropriateness of the administrators causing the Sale Agreement to be completed and that is likely to include interlocutory applications in relation to the provision of material, the issuing of notices to produce or subpoenas, and likely disputes about them as well. All of these matters impact on the appropriateness of the administrators' agreement to the date by which the condition precedent required completion.
30 It is not possible or, at least, not appropriate, to reach any conclusion that there was any deliberateness in the selection of the date by which the relevant condition precedent is to be completed vis-Ă -vis the ability of Sev.en Global to respond or, indeed, the pressure it might place on the Court in relation to hearing the application. On the other hand, in the circumstances where the administrators entered into the Sale Agreement fully aware of the ramifications of doing so, it is most unfortunate that the rationale for the selection of, or agreement to, the relevant date was not addressed in the material.
31 In the foregoing circumstances, whilst it can be accepted that there exists an imperative to expedite the hearing and determination of the administrators' second application for judicial directions, no sufficient basis has been demonstrated as to why the matter must be heard and determined by the Court in the remainder of this year. In reaching this conclusion, consideration has been given to the administrators' concerns about the length of any extension to the convening period and the time for which the administration is extended. Those are appropriate, but in circumstances where there is a bona fide challenge to the administrators' intended course of conduct for which judicial directions are sought, consideration must be given to the according of natural justice to those who seek to resist the administrators' intended actions.